Tech Future: Change and Risk from Downturn

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The current political climate is awash with the concept of change, with both parties in the U.S. having running on that platform (one, clearly, more successfully than the other). Typically people don’t like change, but when you scare the crap out of them – as will be done as the economic collapse removes one in ten to one of five from comfortable jobs – you can get change to happen very quickly.

Over the next year people will be incredibly willing to explore change to cut costs and perhaps preserve their jobs and companies. Let’s explore some of the areas businesses are likely to consider which might otherwise be on the back burner.

Virtual PBX and Email Convergence Hosting

This is actually like Kleenex: it’s both the name of a product class and the name of the leading company in it.

A Virtual PBX is just that – a phone service that provides advanced PBX-like functionality from a centralized location for a per-seat fee that and little initial capital outlay. PBXs are costly to buy and maintain, even VOIP PBX products, and back in the 1980s central office products that were similar to Virtual PBXs would have taken them out had they not been regulated. This is because when you can aggregate a number of companies on the same hardware, much like we currently do with Virtual Machines and hosting, you can reduce dramatically the related costs.

Hosted Email has been available for some time. Recently Microsoft itself started stepping into this market. Hosted email has also proven to be a vastly less expensive and generally more reliable solution than on premise offerings. The end goal, however, is to converge messaging into a single integrated offering, something that firms have been working on since the 80s.

Cisco likely has the most aggressive converged offering at the moment. But I expect others will use the current market environment to drive an integrated future that spans desktop phones, mobile phones, email and other electronic messaging, and especially Voice over IP.

Watch companies like Cisco, Microsoft, Ring Central, and Virtual PBX for some of the more interesting moves here, though first-to-market is a consumer offering from TelCentris called VoxOx.

Landline Elimination

Already I am seeing reports of small businesses and homes, in order to conserve costs, eliminating their wired lines and moving to just use their cellular phones. People have felt tied to their wired lines because that was the way they had always done things and, until recently, seemed more than happy to pay for both wired and cellular products. But with hard economic times comes the need to cut costs and redundant services like wired lines flow to the top of this list.

This actually dovetails with the first item because a virtual PBX works well with a cellular phone network of users and even in a big enterprise can provide a similar experience to the old office phone. I expect as we work through next year more and more builders will choose to design using cellular friendly materials and not pull wire for desktop phones.

Netbooks Eclipse Notebooks

This would typically happen very slowly, if at all, but with a massive focus on cost by both consumers and businesses, coupled with the roll out of WiMax Netbooks – which are both vastly more portable and vastly less expensive than notebooks – netbooks should ramp sharply.

What helps significantly is they are less expensive enough to build so that they actually generate better margins than their more expensive low-cost Notebook alternative.

Coupled with a rich set of Cloud-based services (I’ll get to those in a moment) these products currently do what buyers have always wanted done, combine small size with a small price, to create the opportunity for a major market change. In addition they have little in the way of memory so that if they are stolen there is little likelihood that massive customer lists will go with them.

While they don’t yet ship with TPMs (Trusted Platform Modules) coupled with secure encrypted flash drives or secure on-line services they could actually become less of a risk than their Notebook counterparts. And with integrated WAN or WiMax and products like Computrace or Phoenix Technology’s Failsafe they can eventually be made near bullet proof.

Cloud Based, SAS, Hosted Services

Getting stuff off of the desktop and onto a service has been surprisingly slow going, given the advantages of this approach. It does force folks to do things differently but the benefits are massive and the potential ability to recover from disasters significant.

But folks have control issues and the platforms are often not seen as mature. However, with cost concerns now the overarching problem and with these services now starting to demonstrate clear benefits in a number of areas, offerings like Windows Azure are getting lots of focus and that gives us an opportunity for another major market move.

One of the other impediments was the inherent desire to have the hardware on premise and the related applications under tight control. But financial capital will continue to be very hard to come by, making the ability to deploy new solutions that are critical to the business ever more difficult to do – but with no reduction in the requirement that IT does it. In the end this all points the way forward and it will be interesting to see which vendors flourish and which ones languish as a result.

Security

RSAis likely to have a really good year as economic downturns of this scale are virtually certain to increase both electronic and physical exposures. We are already seeing a large increase in laptop thefts and home invasion robberies, and even carjacking appears to be on the rise. It will undoubtedly get much worse before it gets better because the major layoffs have not yet hit.

If you have laptops with TPMs they should be on and the data encrypted and if you don’t have products like Computrace or Phoenix Technologies Failsafe you should consider making one a part of future bid requirements to protect notebooks.

One of the trends I expect is that insurance services will probably start providing discounts for theft insurance if these protections are in place. And I’m sure premiums will go up if your theft rates increase, as they are likely to, regardless.

But it would be wise to make sure there are processes in place to handle violent crime and that employees are briefed on what to do in case of a disaster and to listen to the news so they don’t walk into a known problem in progress. In addition, when traveling, knowing where to drive and making sure they don’t fall for the common carjacking tricks (like being bumped from the back to get you out of your car).

Much of the problem can be avoided by not making your home or car a target and by being aware of your surroundings at all times. Let’s say the practice of driving or walking while grooving on your iPod or otherwise not being attentive is going to be increasingly unwise, not that it isn’t unwise now. While I’m not expecting it to get as bad as some parts of Eastern Europe where, if you don’t pay attention, you’ll wake up in an ice bath (if you wake up) missing a couple of critical parts like kidneys, it still makes sense to be alert.

It might also be wise to have that talk with your kids about what to do if they are robbed or carjacked. Kids will often fight over possessions, not realizing that the item is replaceable they are not.

Wrapping Up

Economic crisis brings change, and we will be seeing a lot of it over the next few years as a result. Change brings with it opportunity and risk. The risk often is greatest when folks don’t think about and anticipate the changes that are coming and so make decisions tactically that should be strategic.

There are a lot of choices out there that could likely cut your costs sharply that weren’t considered because they were so different. Well, if you don’t cut costs one way, senior management will find creative ways to cut it in another and you don’t want to be on the wrong side of a salary reduction effort.

Most important though, keep your wits about you and your attention on both the trends and your surroundings. What you don’t know will hurt you and your company in during these times and staying engaged and alert can significantly mitigate your risk.